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Tips for Reducing Your Back Taxes

June 19th

For many people, there’s no worse pit-in-your-stomach-feeling than finding out that you owe back taxes. Often, extenuating circumstances such as familial or job issues are what result in IRS debt. When these circumstances don’t resolve, the situation gets worse as interest or late fees mount up, but there are fortunately ways that you can negotiate with the IRS. By maintaining a calm demeanor with open lines of communication, you might be able to reduce the amount of back taxes you owe.

How to Deal with Your IRS Debt

The most important element of reducing your back taxes is to act immediately. Once you realize that you’re going to owe IRS debt, take action by contacting a tax debt lawyer or handling the situation yourself. Fees and interest can quickly add up, making the situation worse, so it’s important to be proactive in handling your situation.

Try Erasing Your Late Fees

One of the biggest ways to reduce the IRS debt owed is to erase your tax fees. If there was a tragedy in your family such as an illness, death, natural disaster, or something completely uncontrollable, you might be exempt from the burden of late fees on your back taxes. Notify the proper authorities by mailing a certified letter stating that you believe you have reasonable cause for failing to pay on time and that you would like to suggest and request the abatement of any late fees or interest on your back taxes. When explaining why you were late, try to keep it as short, yet detailed as possible. In other words, be factual, not emotional.

Pay Back Your IRS Debt

While you might not be able to eliminate back taxes, the quicker you pay back IRS debt over time, the less you’ll owe. Similar to paying back any type of debt, try to make payments the largest reasonable amount that you can afford. If you can’t pay everything back in six years, complete form 656B and apply to have your back taxes reduced.

 

Why You Need a Tax Debt Lawyer

June 17th

With Americans owing more in back taxes to the IRS than ever before, the search for solution is at fever pitch. The two main options that people are weighing to eliminate their back taxes is a tax debt lawyer or an accountant. While both are certainly qualified and experienced to handle back taxes, taxpayers should seriously consider a tax debt lawyer as their solution. At the onset, the benefits of hiring an accountant might seem similar with a tax debt lawyer, but the benefits of each are incredibly different.

Benefits of Hiring a Tax Debt Lawyer

Most taxpayers go straight to their accountant to save both time and money. However, the experience and legal expertise of working with a tax debt lawyer to eliminate or reduce back taxes is priceless. Remember, an attorney is much more qualified to deal with the IRS and handle your case in court. Since dealing with the IRS is both stressful and legally complex, it’s best to hire a tax debt lawyer who is trained and experienced to handle back taxes.

Benefits of hiring a tax debt lawyer include:

Comprehensive advice. A tax debt lawyer has the best of both worlds – legal and financial expertise – whereas an accountant or CPA is limited more to financial knowledge. With a tax debt lawyer, you’ll be presented with more opportunities and solutions such as bankruptcy to eliminate back taxes. When it comes to complex problems with your back taxes, you’ll want as many solutions as possible.
Sound representation. Because a tax debt lawyer is an attorney equipped to present any case in court, you can rest assured that you’re getting the best representation possible for your back taxes. Your attorney will be able to handle tax negotiation and can handle all forms of correspondence with the IRS.
Attorney-client privilege. This legal protection allows you to discuss things openly with your tax debt lawyer since everything will remain confidential. This allows you to communicate more clearly and effectively than with an accountant, thereby allowing the tax debt lawyer to serve you more effectively.

 

How to Discuss Tax Debt with the IRS

June 5th

Just because tax season is over, it doesn’t mean that everyone’s tax problems are over. Each year, it’s estimated that a little over 1.1 percent of individual returns are audited by the IRS. Whether you’re facing an audit, want to discuss your situation, or are trying to pay back your tax debt, chances are you’re going to speak with an IRS agent at one point or another. Whether an IRS agent contacts you or you are somehow able to get through to the agency, here are some tips to consider when discussing your tax debt with the IRS.

Tips for Communicating with the IRS

If you’re working with a tax debt lawyer to settle your back taxes, then chances are that the process will move along smoothly. However, sometimes the IRS does contact individuals directly, especially when they’re performing an audit. Communicating effectively with the IRS is crucial to help solve your tax debt problems and prevent future complications. Basic etiquette for speaking with an IRS agent includes:

· Stop talking. Remember, you don’t have to tell the IRS agent everything. Yes, you want to be honest, but that doesn’t mean you have to go into detail. For instance, instead of defending your situation for 10 minutes, perhaps a simple ‘yes’ or ‘no’ answer would have sufficed. The more you say, the more issues you give to the IRS to pursue for review. Instead, discuss specifics with your tax debt lawyer and focus on taking notes when speaking with an IRS agent.
· Stay calm and be humble. Owing tax debt to the IRS can be strenuous and hurt your ego, but don’t let it show. Be humble and calm when dealing with an IRS agent on the phone. Remember, you want them on your side. If you end up making them mad, you could inadvertently make your tax debt situation harder to deal with.
· Don’t pay immediately. Sometimes the IRS makes mistakes as well when it comes to tax debt. Working with a tax debt lawyer can help you ensure that everything is accurate. Many times, taxpayers don’t actually owe anything. When speaking with an IRS agent, work to clarify the situation surrounding your tax debt.

 
 
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